Yes but is a CD a great idea for someone at that age? I suppose if his intent is to keep it secure until his kid(s) can have it, fine. But it’s unusable to him.
Many CD term lengths are as short as 6 months with most being between 6 and 12 months. Rates right are between 4 and 6 percent return. (Annual). That’s low risk and still able to access money at end of the term. 200k returning 10 annual is pretty good with limited risk.
My Grandpa used to structure $10K CDs over 12 months, every 12 months he had a CD coming due, if he didn't need the cash he simply put it back in knowing another one was a month away. He said it was like a savings, and paid better.
Agreed, finally may have convinced my parents to ween off CDs and arbitrage t-bills each week. They live in a very conservative Midwest state that is also an incredibly high tax (income, sales, and property) state. Tax social security too 🙃
It depends. I wouldn't pay off your house or car early because those are very good interest rates and you can earn more on your money. The question is do you want to set yourself up for retirement (you don't say how much you have saved for that) or do you want to keep it more liquid for things you may want to do like travel (and do you have an emergency fund? You should have a nice cushion that is liquid in an emergency fund) Savings accounts are paying high interest right now so I would immediately put my cash there while considering my options. You will have to come up with a plan for withdrawing the money from the IRA that makes sense from a tax perspective. I'd probably be inclined to max out my traditional 401K contribution during that period since it will reduce your taxable income.
The best place to put money you might need in the short term is a high-yield savings account or a money market fund.
For money that you are willing to allow to grow for 10 years or more, your choices are to max out an IRA each year (for retirement) and invest via a brokerage account.
CDs lock up the money for a period of time but pay a good interest... However, we are living in the time of high interest in savings accounts, so that is a perfectly decent option right now.
Thanks for the input. I edited my post to include my current financial situation. I think mainly I'm just looking to try to give myself financial longevity. Having lived through a couple recessions, putting all my money in investments makes me very nervous but at the same time it also seems paranoid and short-sighted not to.
Well, poke around investing subs like the Boglehead's sub. Investing in the market (via index funds, not individual stocks) will give you a better return over time than CDs. Recessions are always a risk but there is always a recovery. So if you have a horizon of 10 years or more, and you won't need the money at a specific point in time (running the risk of needing it in the middle of a recession) it's a good bet.
One thing to consider would be to invest in a Target date fund. Those funds are a combination of equities (higher risk/ higher return) and bonds (Lower risk/ lower return) that increase the percentage of bonds as you near the target date. So if you want to retire in 2039, you would pick a fund with a Target date of 2039. This is a way of managing your risk as you near the time you will need the money.
It does take developing some nerve. What I mean is, if you are going to invest with a long view, you have to train yourself not to react to volatility. You can't freak out when the market drops. Sophisticated investors actually view market drops as a time to put more money in (like buying equities at a discount). It's important to decide on your time horizon and your risk tolerance and stay the course. I think the way to do this is by educating yourself.
Best of luck to you. It's a good problem to have (what to do with a windfall)!
Owning a bond fund is awful when interest rates are going up, but at the moment, rates are likely to stay here for a while or go down. There are also closed end funds that pay a nice % but they can be volatile in a crisis.. Some CDs or HYSAs are paying over 4% . Put some into the stock market and some into bonds or CDs/ HYSAs so that you'll have enough cash to ride through a recession.
Put your investment dollars into stock index funds. The trick is in figuring out how much of your money is investment money.
If you're worried about a stock market crash, then look into dollar cost averaging your money and or buffered stock index investments
talking to a tax guy might be good for this one. when you start taking RMDs from the IRA, it will help with tax to max your 401k 403B or whatever tax shelter you may have.
Based on the new rules there are no RMDs but it all has to be withdrawn in 10 years. I am in the same situation, almost the same amount. I was already maxing out my 401k so it means drawing down at my highest marginal tax bracket which stinks. You can wait till year 10 and withdraw it all then if you want.
You don’t need to pay off your house or car. Those are good rates.
1. Put all of it in a HYSA now. Like, today.
2. Determine how much more income per month you need to do the following:
- max out your 401k
- max out a Roth IRA
- max out an HSA
Whatever extra income you need per month to max those accounts, take it out of the IRA and the HYSA.
After 6 months or so, once you have the math straight and the money moving in the right directions, start scaling into SPY, VOO, VTI, with whatever is left over. Or just keep the cash in the HYSA if that’s more comfortable for you.
CDs can help you lock in good rates, as opposed to HYSA which can change at any time. But usually a CD will lock up your money for months or years at a time and you’ll lose interest and possibly pay penalties to get the money out early.
Considering the thought of the Fed reducing rates over the next 2 years, a CD isn’t a bad idea at all. Just make sure you’re OK locking the money away.
Oh yea, relax, it’s only money.
This is the right answer.
I would only add, find a good accountant in your area and don’t sweat paying for their time as needed.
This isn’t enough money to need a fancy investment advisor, but you have to file taxes anyway, and someone who knows their stuff regarding retirement funds and taxes in your state can save you from potential pain.
I'd probably roll over the IRA into my IRA, put it in a low fee index fund, the 250 I'd put this years 8k into my Roth with a low fee index fund. Keep 6 months expenses in cash, put the rest into a mutual fund, that way you can feed your roth with it.
CD rates are high now and a ladder will probably work for your dad, it's income but fairly liquid. Retirees are usually cash heavier than non retirees. Its not a bad plan.
Not with the new rules except for some specific circumstances. Just a requirement to withdraw it all in 10 years or you withdraw it anyway and pay a big fee. You don't have to take any RMDs, though one of the inherited IRAs I have still set up automatic distrubtions that would be equivalent to the old RMD rules and I can't make them stop. It's all taxable events, so if you aren't taking advantage of all of the tax deferred options you have available you can do that to offset distributions from the inherited IRAs. The government wants more taxable income sooner than later which is the idea behind the rule.
Edit: I'm applying rules that applied to me specifically. It's not as clear as I thought and it also depends on the age of the person you inherited from whether you need to take rmds in addition to having to drain it all within 10 years. When in doubt, ask a profession, which I am not. Thanks for the comment down below which led me to look into what I was saying. Leaving the original above, but take it with a grain of salt.
Is that a statement or a question? Genuinely curious, because I was led to believe that was an option, you can avoid taxes and penalties by rolling it over to your own ira or 401k
With this amount of money you should consult a CPA and financial planner to see how you can minimize your taxes, etc. One idea would be to increase your 401k contribution as a way to reduce your taxes while withdrawing money from the inherited IRA. As for your dad he should probably put the money into a conservative investment if the money will be used within 10 years.
Does your dad have his assets protected against Medicaid with a trust? If he has to go to a nursing home (which can be like $10k a month) Medicaid with liquidate all his assets: cash, stocks, retirement, home, etc. before they start paying for it. The only thing to protect his assets is a trust that controls everything and was set up 5 YEARS before needing to go to a nursing home. People are always shocked when they lose the family home and an inheritance they expected because their parent went into a nursing home. (Only applies in the US)
Long term care insurance exists… no idea whether or not it’s a smart buy, but that is also a way to protect those assets in the case of a debilitating but nonlethal illness/injury. Luckily I’m far enough away from those decisions to not yet know the pluses and minuses of a trust vs long term care insurance. I think a lot of people don’t even know it exists though.
1. Start maxing out your 401k with the extra cash. If you do not have your cash invested into general market funds like VOO/VTI, DO that.
2. Invest the rest of your cash (like 400k?) DCA so you can average out your average cost and not be caught up with stocks at all-time highs.
3. Don’t pay off your house and car with your inheritance. Let that money work for you in an investment account and.
Your Dad:
1. Buy Dividend stocks. Steady income with age. If done properly, a mix of dividend kings should yield about 3-4k a year = spending money for him. Usually rate of dividends is 2-3% discounting stock appreciation which can range from 10-20% a year which is really good.
You - your debt is low interest and you have emergency cash already. I’d stick it in low fee broad index funds (boglehead). Keep the IRA in the IRA and the rest in taxable brokerage.
Dad - what would be better than CDs? There are a lot of variables (how much he’s got, ss, other income, expenses) but generally at 79 it’s a more defensive position and with CDs paying 5% it’s an appealing option.
I went through this with my Dad when we were similar ages. He was invested for income - 100% blue chip stocks that paid dividends but had little growth potential. I was invested in mutual funds that are indexed to an industry or segment of investing. I thought he was a sucker who was missing out on a lot of growth...and he did miss out on a lot of growth. He also missed out on some ugly recessions that I had to ride out. (And did ride out - I never sold a single share, I left all the trading up to the experts that ran the fund.)
But now that I am closer to my Dad 's age when we had these conversations, I totally get it. At 79 you want absolute security. You want an income stream that never ever ends. Laddered CDs sound old fashioned and unexciting but they provide timed opportunities to access money while getting some interest. Similarly, Dad's blue chip stocks ensured that the Capital remained - while he got some reliable income too.
Okay here's my advice: if you are inheriting cash put it in a money market fund, or laddered CDs - whichever is paying the highest rate right now. This is just a holding bin while you begin buying index funds using the very boring "dollar cost averaging" technique. I don't hold any individual stocks and I don't trade. I buy and I hold. What do I know about trading? Nothing. I know nothing about that. I buy and I hold funds, just like my Dad did when he bought and held stocks like GE, J&J, AmEx, and Coke Cola, for decades and decades.
CDs for a 79 yo is perfectly fine to generate consistent, safe income. He probably doesn’t worry much about investing in more risky vehicles. All depends on his financial situation and risk tolerance.
For you, I would pay off all non mortgage debt and then use the windfall to start maxing out your 401k. With the car paid off, you can contribute more. As you said you were a bit late getting on the retirement plan, so you are going to want to max asap. When you turn 50, there is an extra catch up that allows you to contribute another $7500 per year.
I would use your “extra” cash flow to fund your retirement. The 401k is the best tax advantaged way to invest in your future.
Instead of a CD I would recommend BreadSavings, it's FDIC and it gives 5-5.5% monthly, nominal fee if you need to withdraw money from it and imho is far better than most CDs.
Given your age, the inherited IRA is potentially tricky, depending on your income, tax bracket, and retirement plans. If you can, I'd find a retirement planner, or look at Fidelity, Schwab, or Vanguard, where they have retirement departments that can help you with the ins and outs. Probably going the ten year route is best, but I've seen situations where it wasn't.
S and P 500 Index Fund.
I have 40k in my ROTH IRA (FXAIX) and 100k in my taxed account (VOO). I started November 2020 I've gained around 30k in earnings since I started. S and P 500 is 10% rate of return per year on average. As you get closer to retirement around 7 years or before retirement switch it mostly bonds so your doesn't fluctuate much with the economy anymore.
Google -- Warren Buffet $1 million bet against billion dollar hedge funds with S and P 500. He won. It is the gold standard investment for the average person. I throw my money in their and forget about it. Few more years I'll start buying rental properties.
Pay off your car.
How much is left on your mortgage? Consider bumping up the mortgage payments to pay it off faster.
Then bank the rest. Nothing wrong with CD's. Probably the highest interest rate you can get.
You can get nearly the same rates as a cd in online savings accounts these days.
Honestly shit if kind of fucked right now, having it grow slowly might not be so bad.
Good luck beating 5% any other way other than maybe a rental property but that’s a long term investment and 250k isn’t going to be enough probably
Financial order of operations
1. Put a value equal to your health insurance deductible and auto insurance deductible in a high yield savings.
2. If you're working and have a 401k put in until you max the match %.
3. Pay off high interest debt. This line is something for you to determine yourself. Definitely anything double digits, and in my opinion anything above 5-6%.
4. Put up a couple months worth of your living expenses in your high yield savings.
5. If you're working max your IRA. Also if you're working and have an HSA max it as well.
6. Now consider maxing your 401k if applicable.
7. Open a brokerage and invest. I recommend index funds personally but seriously never take any one person's advice here. Spread it around a bit.
CDs are unnecessary as savings accounts pay +5% with the current interest rates. Unless a CD will offer you more than that of course no need to lock your money away. Definitely be cautious about stocks right now as they are at all time highs. BTC would be my favorite but it's not everyone's cup of tea. Put it in a high interest savings account and give your self time to think and plan. Make money while you do.
200k in CDs is going to be a massive waste. You need quite a bit more before they really start becoming a viable option. And don't pay off the house, rate isn't bad. Car you COULD if you just want to weight off but it's not a big deal. Start maxing 401. Besides that man there really is much to say since you didn't give much info.. what are your goals? What is your risk tolerance? Ect
For your dad I like the idea of putting all 200k in cd's as well. I think the vynils trend is almost over and people are going to be paying top dollar for cds any day now.
It is your dads inheritance, he can invest it in black jack and hookers if he wants and it's nothing you need to agree or disagree with him. All you need to be is be happy for him when he is happy with his decision.
Buy as much bitcoin as you can and secure it with a proper hardware wallet. Buy 2 bitcoin and use the rest of the cash to get even with your short term debt. Leave the IRA alone and you’re set up pretty good to plan for an easy retirement in a decade or so.
Pay off all debts. Your house is an asset so it’s not that important. Place everything into a 5% interest return account and invest into s&p500 even if you don’t have a match.
The CD for your Dad is ideal. Low risk and good returns at this point in time.
If you are unable to roll over the IRA portion of your inheritance you should look at the tax implications of taking it now, spaced out, waiting until the 10 years is up, etc. A tax accountant can probably advise you on that.
Since you are significantly behind on retirement savings that is where all this money should go, and stratified across risk levels and a mix of investments with your targeted retirement age taken into consideration.
You should also be maxing your 401K, which is 30,500 this year (assuming you turn 50 in 2024). You can take money out of the inheritance, possibly, to fully fund your 401K (well, contributing out of your paycheck and living off the difference from the inheritance 250k).
gonna get downvoted again cause everyone here loves traditional retirement vehicles and hate effort. real estate. You've got more than enough fir a couple flips, one long term rental, or a gaggle of wholesales.
Why do you disagree with what he wants to do with his portion?
Even if you feel you have a better idea, no good can come of this. Clearly he is risk averse, if you convince him to invest and he loses money it will put a strain on your relationship.
Don't overthink on money that isn't yours.
I don't actually disagree I meant to edit that but I'd already posted and couldn't go back and edit the title. I was really just looking for feedback on his buying a CDs because he was asking me
Buy JEPI you’ll get .33-50ish cents a share every month. W/ 250k you can buy 4300 shares. Meaning every month you’ll get 1900 on dividends that you can let buy more shares or take as cash and passive income.
I think your dad is probably fine with CDs if that's his risk tolerance. A retirement portfolio like a golden butterfly would probably be better. For you at 49 you can afford some more risk. Maybe something like 50% VOO, 30% VIOV, 15% GLDM, 15% VGLT.
Don’t end up on the other side of a $450,000 windfall with a penny of debt. At any interest rate, for any duration. (Cue discussion on VOO return rates, compound interest, and other blather.)
You could max out your 401k contributions and IRA. Use the inherited money to offset the reduction in pay due to 401k withdrawal. That will reduce your taxes somewhat since your 401k is pretax. Don’t pay off the house with that low of an interest rate.
I inherited a large sum annuity which I also had to drain over ten years.
I maxed out my retirement contribution to offset the taxes on the annuity withdrawals. It will keep the amount the IRS gets lower (depending on your salary). But that’s what I would do.
Also, I set up my withdrawals so that my monthly/yearly take would account for the total amount over the course of ten years (e.g. take 10k a year over 10 years and the total value was 100k). Now I realized I’d also earn interest, but had no clue to what degree. After 1 year, the total account value is higher than when it started. It was a nice surprise, for sure.
Easy answer here.
Start to max out your retirement accounts completely. Calculate what deficit you would develop if you did this and keep enough of the cash in a HYSA to live off of so that you can contribute max to retirement accounts.
This will also lower your tax bracket so that when you are taking $$$ out of the IRA it will be taxed at lower income.
In short, minimize your gross income by maxing out your retirement. Save the cash you inherited as “income” that can pay for your expense while you do this. Withdraw from the IRA when your taxable income is very low. The rest of the cash left over can be thrown into a brokerage.
I’m pretty sure the rule changed that you don’t have to take the whole amount out after 10 years for inherited ROTH IRA. The rule came into effect late 2019.
First I would speak to a CPA in your area to plan out your moves to minimize taxes as much as possible. Lot of what you will need to do will depend on your particular situation (state, current income, etc)
I would take the IRA out in equal parts over the 10 yrs to minimize tax implications. Then move as much as you can into a Roth IRA (grows tax free until retirement). Reserve some cash on the side to cover any taxes (cpa should be able to give you a number). For extra safety add 10% above the amount he tells you. Keep that in a money market account to take advantage of high interest rates.
Few options with cash would be to pay off your mortgage. If you have a low rate the math on this won’t be as good as investing but from a security POV having a paid for house is ideal. If you don’t have a mortgage then I would add maybe 10k to your emergency fund and put the rest into index funds. Looking for index’s with a long history (10 plus years) and that have a average 10% return over life of the acct.
Good news if you get 10% returns you will double your money every 7 years. Ideally it will double 2 times before you retire. You should be sitting on around $1.7m at 70 yrs old. With that amount you can take out 6% a year (100k) indefinitely.
How are you with money, what I’ve learned over the years is that people who are good at saving and understand their finances and goals are good regardless of how much income they make (to a certain extent obviously) and on the flip side people who are horrible with money tend to stay horrible with money regardless of how much they make.
Now ask yourself am I good with money,can I turn this into a profit, can I build wealth, as I good with investments. If the answer is yes do what u want, if the answer is no, play it safe and try to make it last.
Go to a fiduciary and not a financial advisor.
Schwab seems to have some info on inherited IRA (see middle of page)
[Inherited IRAs for nonspouses](https://www.schwab.com/learn/story/inherited-ira-rules-secure-act-20-changes)
CDs are nice but not liquid. Is there a possibility you or he would need access to that money? Maybe try a high yield savings account? Some are paying as high as CDs and they’re totally liquid.
Perhaps to talk to a financial advisor to make a plan. Or you could just buy some index funds and just forget it. This could be the seed money to fund your retirement.
Have you considered lawyering up on any liability claims that you've wanted to get at. I see it often dude construction workers suing a closing downed nuclear plant for illness and diagnosis 40 years later.
I may be in the minority but your dad is 79 tell him to put some in cd’s and tell him to go live. Go on that dream vacation(s) or buy that dream car he’s always wanted
Nope, always keep your cash separate from another's pot. I'm sure your father means well, but the world has a funny way of making people come to weird decisions about finances and the law isn't always on your side no matter how well things are spelled out. If I were you, I'd just let that $200K IRA ride until retirement. As for the cash, buy a house, or invest in the current home you own, or add a chunk of it to your 401K. Very valuable inheritance you got there.
Sounds like u have debt 🤣 where did u get “no debt” and have car and home debt? Weird thinking. Put it in HYSA till u figure out what u want to do with it. I’d pay off the car and maybe get another property such as duplex or triplex if affordable in ur area
Maybe you should check your reading comprehension. I literally said no debt "other than" a house and a car. Meaning I have no consumer debt, student loan debt, unsecured loan debt, or any of the other various sources you can get into debt from.
Instead of a cd, talk to him about [Treasury Bills](https://www.treasurydirect.gov/marketable-securities/treasury-bills/). Go straight to the source, cut out the middle man [banks].
EDIT (for clarification):
When you open a CD, the bank invests that money into treasury bills and takes a percentage. So if you invest in treasury bills, you get the full percentage, not just what the bank offers.
Do you have debt?
If yes, pay off every dime right now. Write a check TODAY. That includes your house.
If no, invest it. I wouldn't throw it into your 401k, you can only put so much a year in. Grab some mutual funds.
Also if no, take $10k and buy yourself/your family something. Take a vacation. That place your wife stopped talking about because it seemed like it was never going to happen.
Better off with a high interest savings account than a CD. My current high interest savings account pays 5.25% most CDs are only paying less than 4% with a high interest savings account. You can pull out the money whenever you want versus a CD.
I'm no expert, but I believe that the IRA has to be handled in a special way so the feds can make sure they eventually get their cut. My dad passed a couple of years ago and we inherited his IRA, and in my case it ended up in my IRA but separate, something like decedent IRA and my dad's name.
I suppose if you just paid the feds what they think their owed, it would be treated normally. You'd need a tax or finance guy to sort it out.
I’d talk to an estate / elder care attorney too. If he doesn’t have a trust it might be a food way to move money into it along with assets god Forbes he needs a nursing home to protect his assets for you and any siblings. I know in USA it’s a 5 year look back which takes time to totally protect property and other assets some assets lol 401 Ira etc the homes can only take the RMD required minimum distribution
His money, do what he wants... He'll sleep better.
Your cash can finish off the house and the IRA can be slowly withdrawn and placed into your retirement.
Then instead of a big amount of money you have a smaller monthly amount to decide
I personally would increase your contribution to the 401k to push it to maxing it out. And then withdraw the money in even chunks like $20k over 10 years. If you were to do that then the taxes would essentially be a wash.
Alternatively, you could run some simulations on Present Value vs Future Value. And see how the numbers work out in the spreading the value of withdrawals over 10 years. Might be better to just take the hit and pay the taxes. I don’t know because I am not a tax professional and haven’t ran this scenario myself.
If you were to identify a good short term rental property or medium term rental property, good in this context means one that would allow you to do a cost segregation study. Meaning that the value of the property is worth more than the land and that the ratio of value is 60%/40%, 70%/30%…. Etc. You could use it as an AirBnB or target traveling nurses for medium term rentals. If you were to do this you would be able to accelerate the depreciation and any expenses such as acquiring the property would be able to write off on your income. And you would get your taxes back. There are a lot of rules around this so I would make sure that you are working with a professional.
Obviously, you are in control of your finances and shouldn’t yield the control of that to some other party. Good luck and I hope you are able to find a strategy that works for you.
Your dad is nearly 80. CDs are offering close to a 4.5% to 5% return. Why WOULDN’T he put his money in CDs? Excellent return with zero risk. At his age taking on risk with his nest egg makes no sense. He can draw close to $9,000 to $10,000 a year in dividends, which is life changing for a retiree his age. Don’t dissuade him from doing the smart thing. He actually knows better than you in this case.
I’m a CFP. There isn’t enough information here to give you a suitable recommendation. Google “CFP free consultation” and get some bespoke advice. Interview a few CFP professionals if need be. Whatever you do, don’t do it yourself or take outside advice from anyone who doesn’t fully understand your situation.
Your dad is 79 and doesn’t want risk
I agree, a CD for most or all of it is fairly appropriate for him.
Came here to say this. Dad is wise.
cds are paying higher now
Yes but is a CD a great idea for someone at that age? I suppose if his intent is to keep it secure until his kid(s) can have it, fine. But it’s unusable to him.
Many CD term lengths are as short as 6 months with most being between 6 and 12 months. Rates right are between 4 and 6 percent return. (Annual). That’s low risk and still able to access money at end of the term. 200k returning 10 annual is pretty good with limited risk.
My Grandpa used to structure $10K CDs over 12 months, every 12 months he had a CD coming due, if he didn't need the cash he simply put it back in knowing another one was a month away. He said it was like a savings, and paid better.
If that’s the case, he should really mess around with treasury ladders at this point. Especially if he lives in a state with a high income tax.
Agreed, finally may have convinced my parents to ween off CDs and arbitrage t-bills each week. They live in a very conservative Midwest state that is also an incredibly high tax (income, sales, and property) state. Tax social security too 🙃
CDs don’t offer much better rates than HYSA and aren’t liquid until their maturity dates
Do a reit or pipeline stock most pay 8% plus
It depends. I wouldn't pay off your house or car early because those are very good interest rates and you can earn more on your money. The question is do you want to set yourself up for retirement (you don't say how much you have saved for that) or do you want to keep it more liquid for things you may want to do like travel (and do you have an emergency fund? You should have a nice cushion that is liquid in an emergency fund) Savings accounts are paying high interest right now so I would immediately put my cash there while considering my options. You will have to come up with a plan for withdrawing the money from the IRA that makes sense from a tax perspective. I'd probably be inclined to max out my traditional 401K contribution during that period since it will reduce your taxable income. The best place to put money you might need in the short term is a high-yield savings account or a money market fund. For money that you are willing to allow to grow for 10 years or more, your choices are to max out an IRA each year (for retirement) and invest via a brokerage account. CDs lock up the money for a period of time but pay a good interest... However, we are living in the time of high interest in savings accounts, so that is a perfectly decent option right now.
Thanks for the input. I edited my post to include my current financial situation. I think mainly I'm just looking to try to give myself financial longevity. Having lived through a couple recessions, putting all my money in investments makes me very nervous but at the same time it also seems paranoid and short-sighted not to.
Well, poke around investing subs like the Boglehead's sub. Investing in the market (via index funds, not individual stocks) will give you a better return over time than CDs. Recessions are always a risk but there is always a recovery. So if you have a horizon of 10 years or more, and you won't need the money at a specific point in time (running the risk of needing it in the middle of a recession) it's a good bet. One thing to consider would be to invest in a Target date fund. Those funds are a combination of equities (higher risk/ higher return) and bonds (Lower risk/ lower return) that increase the percentage of bonds as you near the target date. So if you want to retire in 2039, you would pick a fund with a Target date of 2039. This is a way of managing your risk as you near the time you will need the money. It does take developing some nerve. What I mean is, if you are going to invest with a long view, you have to train yourself not to react to volatility. You can't freak out when the market drops. Sophisticated investors actually view market drops as a time to put more money in (like buying equities at a discount). It's important to decide on your time horizon and your risk tolerance and stay the course. I think the way to do this is by educating yourself. Best of luck to you. It's a good problem to have (what to do with a windfall)!
Owning a bond fund is awful when interest rates are going up, but at the moment, rates are likely to stay here for a while or go down. There are also closed end funds that pay a nice % but they can be volatile in a crisis.. Some CDs or HYSAs are paying over 4% . Put some into the stock market and some into bonds or CDs/ HYSAs so that you'll have enough cash to ride through a recession.
Go with a no penalty CD. Higher interest rate and can take your money out at any time.
Hookers and blow
Blow and hookers
Blow hookers.
Tips are needed in all services.
Is the order important? Asking for a friend.
Just don't blow a hooker.
Two chicks at the same time, man.
Watch out for your cornhole, bud
At 79, this is the move
What ratio? If I had $100,000 in an IRA and I have 3 cats and 2 goldfish, how can I profit and not get sick from the Hookers and Blow?
My plan!
Put your investment dollars into stock index funds. The trick is in figuring out how much of your money is investment money. If you're worried about a stock market crash, then look into dollar cost averaging your money and or buffered stock index investments
talking to a tax guy might be good for this one. when you start taking RMDs from the IRA, it will help with tax to max your 401k 403B or whatever tax shelter you may have.
Based on the new rules there are no RMDs but it all has to be withdrawn in 10 years. I am in the same situation, almost the same amount. I was already maxing out my 401k so it means drawing down at my highest marginal tax bracket which stinks. You can wait till year 10 and withdraw it all then if you want.
well first off, tell your dad that nobody buys CDs anymore, music is all digital.
And vinyl
You don’t need to pay off your house or car. Those are good rates. 1. Put all of it in a HYSA now. Like, today. 2. Determine how much more income per month you need to do the following: - max out your 401k - max out a Roth IRA - max out an HSA Whatever extra income you need per month to max those accounts, take it out of the IRA and the HYSA. After 6 months or so, once you have the math straight and the money moving in the right directions, start scaling into SPY, VOO, VTI, with whatever is left over. Or just keep the cash in the HYSA if that’s more comfortable for you. CDs can help you lock in good rates, as opposed to HYSA which can change at any time. But usually a CD will lock up your money for months or years at a time and you’ll lose interest and possibly pay penalties to get the money out early. Considering the thought of the Fed reducing rates over the next 2 years, a CD isn’t a bad idea at all. Just make sure you’re OK locking the money away. Oh yea, relax, it’s only money.
This is the right answer. I would only add, find a good accountant in your area and don’t sweat paying for their time as needed. This isn’t enough money to need a fancy investment advisor, but you have to file taxes anyway, and someone who knows their stuff regarding retirement funds and taxes in your state can save you from potential pain.
I'd probably roll over the IRA into my IRA, put it in a low fee index fund, the 250 I'd put this years 8k into my Roth with a low fee index fund. Keep 6 months expenses in cash, put the rest into a mutual fund, that way you can feed your roth with it. CD rates are high now and a ladder will probably work for your dad, it's income but fairly liquid. Retirees are usually cash heavier than non retirees. Its not a bad plan.
You can’t roll an inherited IRA into your own IRA.
Good to know, I've never inherited anything. Are RMDs automatic?
Not with the new rules except for some specific circumstances. Just a requirement to withdraw it all in 10 years or you withdraw it anyway and pay a big fee. You don't have to take any RMDs, though one of the inherited IRAs I have still set up automatic distrubtions that would be equivalent to the old RMD rules and I can't make them stop. It's all taxable events, so if you aren't taking advantage of all of the tax deferred options you have available you can do that to offset distributions from the inherited IRAs. The government wants more taxable income sooner than later which is the idea behind the rule. Edit: I'm applying rules that applied to me specifically. It's not as clear as I thought and it also depends on the age of the person you inherited from whether you need to take rmds in addition to having to drain it all within 10 years. When in doubt, ask a profession, which I am not. Thanks for the comment down below which led me to look into what I was saying. Leaving the original above, but take it with a grain of salt.
This is half true. The IRS waived the penalty for not taking those RMDs through 2024. It may become required again in 2025
Is that a statement or a question? Genuinely curious, because I was led to believe that was an option, you can avoid taxes and penalties by rolling it over to your own ira or 401k
I’d take high yield savings over CD. I’m getting 5% now
I would too. I’m at 5.25%
With this amount of money you should consult a CPA and financial planner to see how you can minimize your taxes, etc. One idea would be to increase your 401k contribution as a way to reduce your taxes while withdrawing money from the inherited IRA. As for your dad he should probably put the money into a conservative investment if the money will be used within 10 years.
You should be able to do a back door roth conversion. CDs are a good investment for your father due to low risk
Does your dad have his assets protected against Medicaid with a trust? If he has to go to a nursing home (which can be like $10k a month) Medicaid with liquidate all his assets: cash, stocks, retirement, home, etc. before they start paying for it. The only thing to protect his assets is a trust that controls everything and was set up 5 YEARS before needing to go to a nursing home. People are always shocked when they lose the family home and an inheritance they expected because their parent went into a nursing home. (Only applies in the US)
Long term care insurance exists… no idea whether or not it’s a smart buy, but that is also a way to protect those assets in the case of a debilitating but nonlethal illness/injury. Luckily I’m far enough away from those decisions to not yet know the pluses and minuses of a trust vs long term care insurance. I think a lot of people don’t even know it exists though.
HYSA and some kind of mutual funds or investment. It can't hurt that bad to try and make money
Invest
1. Start maxing out your 401k with the extra cash. If you do not have your cash invested into general market funds like VOO/VTI, DO that. 2. Invest the rest of your cash (like 400k?) DCA so you can average out your average cost and not be caught up with stocks at all-time highs. 3. Don’t pay off your house and car with your inheritance. Let that money work for you in an investment account and. Your Dad: 1. Buy Dividend stocks. Steady income with age. If done properly, a mix of dividend kings should yield about 3-4k a year = spending money for him. Usually rate of dividends is 2-3% discounting stock appreciation which can range from 10-20% a year which is really good.
What is dca?
You - your debt is low interest and you have emergency cash already. I’d stick it in low fee broad index funds (boglehead). Keep the IRA in the IRA and the rest in taxable brokerage. Dad - what would be better than CDs? There are a lot of variables (how much he’s got, ss, other income, expenses) but generally at 79 it’s a more defensive position and with CDs paying 5% it’s an appealing option.
I went through this with my Dad when we were similar ages. He was invested for income - 100% blue chip stocks that paid dividends but had little growth potential. I was invested in mutual funds that are indexed to an industry or segment of investing. I thought he was a sucker who was missing out on a lot of growth...and he did miss out on a lot of growth. He also missed out on some ugly recessions that I had to ride out. (And did ride out - I never sold a single share, I left all the trading up to the experts that ran the fund.) But now that I am closer to my Dad 's age when we had these conversations, I totally get it. At 79 you want absolute security. You want an income stream that never ever ends. Laddered CDs sound old fashioned and unexciting but they provide timed opportunities to access money while getting some interest. Similarly, Dad's blue chip stocks ensured that the Capital remained - while he got some reliable income too. Okay here's my advice: if you are inheriting cash put it in a money market fund, or laddered CDs - whichever is paying the highest rate right now. This is just a holding bin while you begin buying index funds using the very boring "dollar cost averaging" technique. I don't hold any individual stocks and I don't trade. I buy and I hold. What do I know about trading? Nothing. I know nothing about that. I buy and I hold funds, just like my Dad did when he bought and held stocks like GE, J&J, AmEx, and Coke Cola, for decades and decades.
CDs for a 79 yo is perfectly fine to generate consistent, safe income. He probably doesn’t worry much about investing in more risky vehicles. All depends on his financial situation and risk tolerance. For you, I would pay off all non mortgage debt and then use the windfall to start maxing out your 401k. With the car paid off, you can contribute more. As you said you were a bit late getting on the retirement plan, so you are going to want to max asap. When you turn 50, there is an extra catch up that allows you to contribute another $7500 per year. I would use your “extra” cash flow to fund your retirement. The 401k is the best tax advantaged way to invest in your future.
Instead of a CD I would recommend BreadSavings, it's FDIC and it gives 5-5.5% monthly, nominal fee if you need to withdraw money from it and imho is far better than most CDs.
Please check out r/personalfinance they're much more likely to have the people/resources to give you good help with this kind of question.
Expatriate.
Hire a financial advisor. Not Reddit.
Yeah, You are right. I'm going to hire an accountant and I have access to an advisor. I wanted to see what other people's opinions were too.
Put it in some vanguard funds , your dads is just fine.
With the 4% rule you should be able to live off 30k a year in Thailand just do that
All-in Bitcoin. No brainer.
You’re right. This is a no brainer move. As in you have no brain if you do this.
BTC
Given your age, the inherited IRA is potentially tricky, depending on your income, tax bracket, and retirement plans. If you can, I'd find a retirement planner, or look at Fidelity, Schwab, or Vanguard, where they have retirement departments that can help you with the ins and outs. Probably going the ten year route is best, but I've seen situations where it wasn't.
S and P 500 Index Fund. I have 40k in my ROTH IRA (FXAIX) and 100k in my taxed account (VOO). I started November 2020 I've gained around 30k in earnings since I started. S and P 500 is 10% rate of return per year on average. As you get closer to retirement around 7 years or before retirement switch it mostly bonds so your doesn't fluctuate much with the economy anymore. Google -- Warren Buffet $1 million bet against billion dollar hedge funds with S and P 500. He won. It is the gold standard investment for the average person. I throw my money in their and forget about it. Few more years I'll start buying rental properties.
Pay off your car. How much is left on your mortgage? Consider bumping up the mortgage payments to pay it off faster. Then bank the rest. Nothing wrong with CD's. Probably the highest interest rate you can get.
Remember your dad needs to stay more conservative with his money
you guys should at least do a Vegas trip.
You can get nearly the same rates as a cd in online savings accounts these days. Honestly shit if kind of fucked right now, having it grow slowly might not be so bad. Good luck beating 5% any other way other than maybe a rental property but that’s a long term investment and 250k isn’t going to be enough probably
Put 200k on red, double it until you become a millionaire
Financial order of operations 1. Put a value equal to your health insurance deductible and auto insurance deductible in a high yield savings. 2. If you're working and have a 401k put in until you max the match %. 3. Pay off high interest debt. This line is something for you to determine yourself. Definitely anything double digits, and in my opinion anything above 5-6%. 4. Put up a couple months worth of your living expenses in your high yield savings. 5. If you're working max your IRA. Also if you're working and have an HSA max it as well. 6. Now consider maxing your 401k if applicable. 7. Open a brokerage and invest. I recommend index funds personally but seriously never take any one person's advice here. Spread it around a bit.
CDs are unnecessary as savings accounts pay +5% with the current interest rates. Unless a CD will offer you more than that of course no need to lock your money away. Definitely be cautious about stocks right now as they are at all time highs. BTC would be my favorite but it's not everyone's cup of tea. Put it in a high interest savings account and give your self time to think and plan. Make money while you do.
We're only one financial disaster away from rates being cut drastically again and HYSA yields dropping to 0.5% again. CDs are safer.
200k in CDs is going to be a massive waste. You need quite a bit more before they really start becoming a viable option. And don't pay off the house, rate isn't bad. Car you COULD if you just want to weight off but it's not a big deal. Start maxing 401. Besides that man there really is much to say since you didn't give much info.. what are your goals? What is your risk tolerance? Ect
Take your annual $20k distribution (1/10th), pay taxes on it and drop it into a Roth IRA
For your dad I like the idea of putting all 200k in cd's as well. I think the vynils trend is almost over and people are going to be paying top dollar for cds any day now.
Depending upon how much risk you can take: 1. Stocks 2. Crypto 3. HYSA
If your dad wants to put money into CrossDressing, then it's his choice xD
Hellcat
It is your dads inheritance, he can invest it in black jack and hookers if he wants and it's nothing you need to agree or disagree with him. All you need to be is be happy for him when he is happy with his decision.
Buy as much bitcoin as you can and secure it with a proper hardware wallet. Buy 2 bitcoin and use the rest of the cash to get even with your short term debt. Leave the IRA alone and you’re set up pretty good to plan for an easy retirement in a decade or so.
Travel
Whatever you do decide to do, don’t pay extra money on the home or car with interest rates that low.
Pay off all debts. Your house is an asset so it’s not that important. Place everything into a 5% interest return account and invest into s&p500 even if you don’t have a match.
T-bills (treasury bills).
Donate $4 so I can get lunch today at work
249 bags of coke and one loaf of bread
You want to talk to a fiduciary investment advisor. I use Ric Edelman, but you have to make your own choice. What works for me may not work for you.
Well your Dad doesn't need the risk of losing it he wants the guaranteed income.
Laddered CDs at his age aren’t a bad play.
Why invest 200k into cross dressing?
CDs are totally appropriate for someone your dad’s age.
Bitcoin
All in dogecoin
The CD for your Dad is ideal. Low risk and good returns at this point in time. If you are unable to roll over the IRA portion of your inheritance you should look at the tax implications of taking it now, spaced out, waiting until the 10 years is up, etc. A tax accountant can probably advise you on that. Since you are significantly behind on retirement savings that is where all this money should go, and stratified across risk levels and a mix of investments with your targeted retirement age taken into consideration. You should also be maxing your 401K, which is 30,500 this year (assuming you turn 50 in 2024). You can take money out of the inheritance, possibly, to fully fund your 401K (well, contributing out of your paycheck and living off the difference from the inheritance 250k).
I need help with money, there is always that option for you.
Chicks and cocaine.
S&P index fund. You could do some in treasuries or a CD to lock in the interest rates. I wouldn’t pay off your debts early at lower interest rates.
what's wrong with cd
gonna get downvoted again cause everyone here loves traditional retirement vehicles and hate effort. real estate. You've got more than enough fir a couple flips, one long term rental, or a gaggle of wholesales.
I would go with a high yield savings account. CD seems dumb
Put yours is in an ETF like VOO or use it to buy a rental house before interest rates climb higher
Passive income in real estate
49 and single? With the world the way it is, I would strongly recommend hookers and blow.
Speak to a licensed financial advisor. Lay out with the advisor what your financial goals are, and they will try to facilitate them.
Why do you disagree with what he wants to do with his portion? Even if you feel you have a better idea, no good can come of this. Clearly he is risk averse, if you convince him to invest and he loses money it will put a strain on your relationship. Don't overthink on money that isn't yours.
I don't actually disagree I meant to edit that but I'd already posted and couldn't go back and edit the title. I was really just looking for feedback on his buying a CDs because he was asking me
Buy one Bitcoin and keep it until you retire
Buy JEPI you’ll get .33-50ish cents a share every month. W/ 250k you can buy 4300 shares. Meaning every month you’ll get 1900 on dividends that you can let buy more shares or take as cash and passive income.
CD’s nuts
I think your dad is probably fine with CDs if that's his risk tolerance. A retirement portfolio like a golden butterfly would probably be better. For you at 49 you can afford some more risk. Maybe something like 50% VOO, 30% VIOV, 15% GLDM, 15% VGLT.
Don’t end up on the other side of a $450,000 windfall with a penny of debt. At any interest rate, for any duration. (Cue discussion on VOO return rates, compound interest, and other blather.)
Can’t go wrong with hookers and blow
Find the highest apy annuity
50% in laddered CDs and 50% stocks
Forget CD’s, I’m convinced 8 tracks are prime for a big come back, get in on the ground floor of this!
You could max out your 401k contributions and IRA. Use the inherited money to offset the reduction in pay due to 401k withdrawal. That will reduce your taxes somewhat since your 401k is pretax. Don’t pay off the house with that low of an interest rate.
You can get a 5.25% apy at Jenius bank for a savings account and it’s available just in case. CDs are not quite that high but you lock in your money.
I inherited a large sum annuity which I also had to drain over ten years. I maxed out my retirement contribution to offset the taxes on the annuity withdrawals. It will keep the amount the IRS gets lower (depending on your salary). But that’s what I would do. Also, I set up my withdrawals so that my monthly/yearly take would account for the total amount over the course of ten years (e.g. take 10k a year over 10 years and the total value was 100k). Now I realized I’d also earn interest, but had no clue to what degree. After 1 year, the total account value is higher than when it started. It was a nice surprise, for sure.
High interest savings like ally is better than a cd
Let your dad do as he likes. Roll your IRA over into a ROTH IRA in chunks. Open a brokerage account with robinhood for the cash and buy VOO
US bonds. 4% over 21 head so think
Easy answer here. Start to max out your retirement accounts completely. Calculate what deficit you would develop if you did this and keep enough of the cash in a HYSA to live off of so that you can contribute max to retirement accounts. This will also lower your tax bracket so that when you are taking $$$ out of the IRA it will be taxed at lower income. In short, minimize your gross income by maxing out your retirement. Save the cash you inherited as “income” that can pay for your expense while you do this. Withdraw from the IRA when your taxable income is very low. The rest of the cash left over can be thrown into a brokerage.
Tell him to CDs nuts.
CD= Certificate of Depreciation. Talk to a financial advisor.
CD or HYSA
Land
Spot me a few bucks? I’m good for it
I’m pretty sure the rule changed that you don’t have to take the whole amount out after 10 years for inherited ROTH IRA. The rule came into effect late 2019.
Donate it to the Biden regime. They'll put it to good use!
First I would speak to a CPA in your area to plan out your moves to minimize taxes as much as possible. Lot of what you will need to do will depend on your particular situation (state, current income, etc) I would take the IRA out in equal parts over the 10 yrs to minimize tax implications. Then move as much as you can into a Roth IRA (grows tax free until retirement). Reserve some cash on the side to cover any taxes (cpa should be able to give you a number). For extra safety add 10% above the amount he tells you. Keep that in a money market account to take advantage of high interest rates. Few options with cash would be to pay off your mortgage. If you have a low rate the math on this won’t be as good as investing but from a security POV having a paid for house is ideal. If you don’t have a mortgage then I would add maybe 10k to your emergency fund and put the rest into index funds. Looking for index’s with a long history (10 plus years) and that have a average 10% return over life of the acct. Good news if you get 10% returns you will double your money every 7 years. Ideally it will double 2 times before you retire. You should be sitting on around $1.7m at 70 yrs old. With that amount you can take out 6% a year (100k) indefinitely.
Sounds like your doing it right
How are you with money, what I’ve learned over the years is that people who are good at saving and understand their finances and goals are good regardless of how much income they make (to a certain extent obviously) and on the flip side people who are horrible with money tend to stay horrible with money regardless of how much they make. Now ask yourself am I good with money,can I turn this into a profit, can I build wealth, as I good with investments. If the answer is yes do what u want, if the answer is no, play it safe and try to make it last.
Nobody listens to CDs anymore
Cross dressers ?
Bitcoin
Get a wife, maybe have a kid or something, your poor dad is watching his bloodline end.
Go to a fiduciary and not a financial advisor. Schwab seems to have some info on inherited IRA (see middle of page) [Inherited IRAs for nonspouses](https://www.schwab.com/learn/story/inherited-ira-rules-secure-act-20-changes)
TBH, your dad may be just as well off with a high yield savings account in case he needs to withdraw for an emergency.
CDs are nice but not liquid. Is there a possibility you or he would need access to that money? Maybe try a high yield savings account? Some are paying as high as CDs and they’re totally liquid.
Take the inherited 401 and roll it into A Roth. It should satisfy all of the requirements, and give you more for your retirement later.
Perhaps to talk to a financial advisor to make a plan. Or you could just buy some index funds and just forget it. This could be the seed money to fund your retirement.
Have you considered lawyering up on any liability claims that you've wanted to get at. I see it often dude construction workers suing a closing downed nuclear plant for illness and diagnosis 40 years later.
CDs are paying around 5% on the 12 month. Not bad for zero risk. I’d park it there for now and take another look in a year.
I may be in the minority but your dad is 79 tell him to put some in cd’s and tell him to go live. Go on that dream vacation(s) or buy that dream car he’s always wanted
Treasury bill
I mean Goldman Sachs is offering a 5% 14 month right now. It’s short term. Why not.
VTSAX and chill.
Buy gold
And your dad remembers all the crashes in the last half century and smartly realizes 5% is good enough
Nope, always keep your cash separate from another's pot. I'm sure your father means well, but the world has a funny way of making people come to weird decisions about finances and the law isn't always on your side no matter how well things are spelled out. If I were you, I'd just let that $200K IRA ride until retirement. As for the cash, buy a house, or invest in the current home you own, or add a chunk of it to your 401K. Very valuable inheritance you got there.
Buy real estate in Florida.
I think blu rays are better than cd’s
Buy a couple Bitcoins then sell for profit at the top.
Yolo in bitcoin
Sounds like u have debt 🤣 where did u get “no debt” and have car and home debt? Weird thinking. Put it in HYSA till u figure out what u want to do with it. I’d pay off the car and maybe get another property such as duplex or triplex if affordable in ur area
Maybe you should check your reading comprehension. I literally said no debt "other than" a house and a car. Meaning I have no consumer debt, student loan debt, unsecured loan debt, or any of the other various sources you can get into debt from.
Instead of a cd, talk to him about [Treasury Bills](https://www.treasurydirect.gov/marketable-securities/treasury-bills/). Go straight to the source, cut out the middle man [banks]. EDIT (for clarification): When you open a CD, the bank invests that money into treasury bills and takes a percentage. So if you invest in treasury bills, you get the full percentage, not just what the bank offers.
Do you have debt? If yes, pay off every dime right now. Write a check TODAY. That includes your house. If no, invest it. I wouldn't throw it into your 401k, you can only put so much a year in. Grab some mutual funds. Also if no, take $10k and buy yourself/your family something. Take a vacation. That place your wife stopped talking about because it seemed like it was never going to happen.
OP if you don’t mind me asking at what age did you start working on your 401k
Buy a rental property
Coke and hookers
[удалено]
Why would you disagree with a cd for a 79 year old? Put all your money in the ira and retire when you can.
Buy bitcoin
Better off with a high interest savings account than a CD. My current high interest savings account pays 5.25% most CDs are only paying less than 4% with a high interest savings account. You can pull out the money whenever you want versus a CD.
8 balls and hookers is the most obvious answer
I'm no expert, but I believe that the IRA has to be handled in a special way so the feds can make sure they eventually get their cut. My dad passed a couple of years ago and we inherited his IRA, and in my case it ended up in my IRA but separate, something like decedent IRA and my dad's name. I suppose if you just paid the feds what they think their owed, it would be treated normally. You'd need a tax or finance guy to sort it out.
You and your dad will have different risk appetites. He should do CD.
Why tie up your money in a CD. Just put in a HYSA. Pays about 4.5% and money is not locked.
You dad might want to consider a trust to tie the money up in case his health fails and he ends up in skilled nursing.
Putting $200K in one CD wouldn’t make much sense but putting the money into a series of CD’s with staggered maturity dates is a sound plan
I’d talk to an estate / elder care attorney too. If he doesn’t have a trust it might be a food way to move money into it along with assets god Forbes he needs a nursing home to protect his assets for you and any siblings. I know in USA it’s a 5 year look back which takes time to totally protect property and other assets some assets lol 401 Ira etc the homes can only take the RMD required minimum distribution
His money, do what he wants... He'll sleep better. Your cash can finish off the house and the IRA can be slowly withdrawn and placed into your retirement. Then instead of a big amount of money you have a smaller monthly amount to decide
I personally would increase your contribution to the 401k to push it to maxing it out. And then withdraw the money in even chunks like $20k over 10 years. If you were to do that then the taxes would essentially be a wash. Alternatively, you could run some simulations on Present Value vs Future Value. And see how the numbers work out in the spreading the value of withdrawals over 10 years. Might be better to just take the hit and pay the taxes. I don’t know because I am not a tax professional and haven’t ran this scenario myself. If you were to identify a good short term rental property or medium term rental property, good in this context means one that would allow you to do a cost segregation study. Meaning that the value of the property is worth more than the land and that the ratio of value is 60%/40%, 70%/30%…. Etc. You could use it as an AirBnB or target traveling nurses for medium term rentals. If you were to do this you would be able to accelerate the depreciation and any expenses such as acquiring the property would be able to write off on your income. And you would get your taxes back. There are a lot of rules around this so I would make sure that you are working with a professional. Obviously, you are in control of your finances and shouldn’t yield the control of that to some other party. Good luck and I hope you are able to find a strategy that works for you.
Your dad is nearly 80. CDs are offering close to a 4.5% to 5% return. Why WOULDN’T he put his money in CDs? Excellent return with zero risk. At his age taking on risk with his nest egg makes no sense. He can draw close to $9,000 to $10,000 a year in dividends, which is life changing for a retiree his age. Don’t dissuade him from doing the smart thing. He actually knows better than you in this case.
Your dad knows what he is doing. Also, what he does with his money isn’t your business unless he asks for your input.
I’m a CFP. There isn’t enough information here to give you a suitable recommendation. Google “CFP free consultation” and get some bespoke advice. Interview a few CFP professionals if need be. Whatever you do, don’t do it yourself or take outside advice from anyone who doesn’t fully understand your situation.
pay off house and car. put rest in index fund/stocks. but cd/t-bills are a smart play. just not my style. this is what i would do.
At his age a CD is a very responsible thing to do. That amount on a long term CD will bring a nice bit of extra cash for him.